Bob is the managing director of Hatby Pry Ltd, a family business. There are four shareholders in the company, himself, his wife Jessica and their two children, Dane and Natalie.

Bob holds 25% of the shares with each of the other family members holding 10%. Jessica is also a director of the company as is Dane. Natalie has always been dismissed as part of the company as Bob has determined that the company would always go to his son Dane anyway. Natalie has expressed a desire to be more involved but this has always been ignored.

In addition an external investor, Hunter holds the remaining 45% of the shares.

Hunter has been sweet on Natalie since the first day he laid his eyes on her. They started dating in 2020.

A) In September this year Bob, Jessica and Dane have come to see you seeking advice regarding diluting Natalies shares. They are concerned that a marriage between her and Hunter would give them control over the company. They want to know whether this is possible and in what circumstances a share dilution would be legal. They have also asked you how this might effect their decision making power in the company. (5 marks)